B. Will the products offered compete head-to-head with those of a competitor?C. Can this action successfully draw customers away from competitors' markets?D. Are there enough similarities within the market segment to warrant such high costs?E. Will this action eliminate the need for individualized advertising and promotion?When the increased customer value involves adding new products or a new chain of stores, the product differentiation - market segmentation trade-off raises a critical issue: Are the new products or new chains simply stealing customers and sales from the older existing ones? This is known as cannibalization.AACSB: 3LL: 2Learning Objective: 09-01 Explain what market segmentation is and when to use it71.(p. 225)Cannibalization would most likely occur if A. Dell adds high-end speaker systems to its line.B.General Mills markets a new version of sweetened Cheerios that tastes like mango.C. General Motors markets a sport coupe similar to the BMW Z4.D. Pillsbury adds boxed sugar to its product line.E. Procter & Gamble adds a new line of baby clothing to its product mix.Consumers who purchase sweetened Cheerios such as their honey-coated version would be likely to try and perhaps switch to the new product. Thus, the mango version could cannibalize sales from the other sweetened version of Cheerios.AACSB: 3LL: 3Learning Objective: 09-01 Explain what market segmentation is and when to use it9-106
Chapter 09 - Market Segmentation, Targeting, and Positioning72.(p. 226)The purpose of the five key steps in segmenting and targeting markets is to Figure 9-2 shows the five key steps in segmenting and targeting markets link market needs of customers to the organization's marketing program.AACSB: 3LL: 2Learning Objective: 09-02 Identify the five steps involved in segmenting and targeting markets73.(p. 226)The second step in segmenting and targeting markets is to The steps in segmenting and targeting markets include: (1) group potential buyers into segments; (2) group products to be sold into categories; (3) develop a market-product grid and estimate size of markets; (4) select target markets; (5) take marketing actions to reach target markets.
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